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CARSTAR Franchise ProfileAutomotive Franchises > Auto Repair |
What Are the Initial Investment Requirements for a CARSTAR Franchise?
To open a CARSTAR franchise, the initial investment ranges from $23,500 to $804,300. This includes a franchise fee of $10,000. Additionally, potential franchisees should be prepared for ongoing costs, such as a royalty fee of 6% and a marketing fee of 1%. A cash requirement between $23,500 and $165,300 is also necessary, along with a net worth requirement of $1,000,000 to ensure financial stability and growth potential.
What Is the Average Revenue Potential for CARSTAR Franchisees?
CARSTAR franchisees can expect significant revenue potential, with average annual revenue per unit around $2,553,366. The median annual revenue is approximately $1,705,212, while the highest recorded revenue reaches an impressive $17,238,039. This financial performance highlights the brand's strong market presence and operational efficiency, making it an attractive option for aspiring franchisees.
What Are the Financial Metrics and Breakeven Timeline for CARSTAR?
The financial metrics for CARSTAR franchises indicate a healthy gross profit margin of 56.7%, with operating expenses accounting for 44.9% of revenue. Franchisees can anticipate an EBITDA of 11.8%, which reflects the profitability of the business. The breakeven time is approximately 18 months, while the investment payback period is around 10 months, providing a clear timeline for financial recovery and growth.
How Has CARSTAR Expanded Its Franchise Network Recently?
CARSTAR has shown consistent growth in its franchise network, increasing from 395 franchised units in 2021 to 446 in 2023. This expansion reflects the brand's strong demand and successful business model. Notably, CARSTAR had 10 corporate-owned units in 2021 but transitioned to a fully franchised model by 2022, emphasizing its commitment to franchisee success and community-based operations.
CARSTAR Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
CARSTAR Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 405 | 419 | 446 |
| Net Change YoY | 14 | 27 | |
| Franchised Units | 395 | 419 | 446 |
| Net Change YoY | 24 | 27 | |
| Corporate Units | 10 | 0 | 0 |
| Net Change YoY | -10 | 0 |
Company Background
CARSTAR is a leading automotive repair franchise specializing in collision repair services. Founded in 1989, CARSTAR has grown to become a trusted name in the industry, with a commitment to quality and customer satisfaction. The franchise operates across North America, providing comprehensive repair services that include everything from minor dents to major collision repairs. CARSTAR's network of franchise locations is dedicated to using advanced technology and high-quality materials to ensure vehicles are restored to their pre-accident condition.
Franchise Opportunity
Investing in a CARSTAR franchise presents a unique opportunity for aspiring entrepreneurs looking to enter the automotive repair industry. With an initial investment ranging from $23,500 to $804,300, franchisees can tap into a well-established brand with a proven business model. CARSTAR provides extensive training, ongoing support, and a recognized name that can attract customers in a competitive market. This franchise is ideal for individuals passionate about automotive care and looking to build a successful business.
Financial Overview
The financial metrics for a CARSTAR franchise highlight its potential for profitability. The average annual revenue per unit is approximately $3,034,922, with a median of $1,705,212. New franchisees can expect a breakeven time of around 18 months and an investment payback period of just 10 months. With a royalty fee of 6% and a marketing fee of 1%, franchisees can effectively manage their operational costs while maximizing revenue potential.
Corporate Structure
CARSTAR is part of the Driven Brands family, which supports its franchisees with a robust corporate structure. The company focuses on building a strong franchise network, with 446 franchised units reported in 2023. This growth reflects CARSTAR's commitment to expanding its market presence and enhancing brand recognition. Franchisees benefit from the backing of a corporate team that specializes in operations, marketing, and technology, ensuring they have the resources needed for success.
Marketing Support
CARSTAR provides comprehensive marketing support to its franchisees, helping them effectively reach their target audience. With a marketing fee of just 1%, franchisees can participate in national advertising campaigns and local marketing initiatives that drive brand awareness. The franchise also offers training on digital marketing strategies and customer engagement techniques, enabling franchisees to build strong relationships with their customers and enhance their local presence.
Training and Support
The training and support offered by CARSTAR are key components of its franchise program. New franchisees undergo an intensive training program that covers all aspects of running a successful collision repair business, from technical skills to customer service. Ongoing support is provided through regular check-ins, operational guidance, and access to a network of experienced franchisees. This commitment to training ensures that franchisees are well-equipped to navigate challenges and capitalize on growth opportunities in the automotive repair industry.
Frequently Asked Questions
The initial investment for a CARSTAR franchise ranges from $23,500 to $804,300, including a franchise fee of $10,000.